Cost savings could be considered as a fourth revenue generation model. New Internet-only companies may not appreciate the cost-savings possible on the Web, but many businesses are able to lower costs significantly by moving essential business processes to the Internet. Ben Franklin recognised this revenue source when he told us, "A penny saved is a penny earned." Let me outline some of the ways that the Internet can save costs:

1. Staffing. Simply stated, the Internet saves time. It is significantly less expensive -- and more accurate -- to have a customer enter an order over the Internet than it is to take it by phone or rekey it into your computer system after the sale. In online stores, customers usually wait on themselves, so you don't need as many sales clerks.
   However, staffing needs to be increased in other areas -- answering e-mail, for example. Since it is so easy to ask questions, many more customers are doing so on the Web, overwhelming some businesses. A few react by making it impossible to e-mail them at all!. Others automate their e-mail response systems and provide enough staff to respond to more complex inquires.

   Procurement departments have found that online transactions dramatically cut the cost of processing a purchase order. With the availability of Web-based EDI (Electronic Data Interchange), many smaller businesses are able to conduct B2B commerce electronically where it was previously cost-prohibitive.

2. Distribution of sales materials. A lot of money and energy is invested on printing and postage in running something like a catalogue business, or sending sales materials to a far-flung office. The Web shines as a way to distribute great amounts of information inexpensively. Many companies put their entire catalogue on the Web and then keep it up-to-date, longing for the year when they won't have to print a catalogue at all.
   Others put their sales materials on the Internet (or on a company Intranet for employees). While there is some expense in converting text and graphics to the Web, once the material is there, it costs next to nothing to keep it there. Updating of data is simpler, too, especially on database-driven sites.
3. Advertising costs. For some businesses, especially those in neatly-defined niches, advertising costs are lower. Since more and more purchasing agents are using the Web for shopping, and since this is an established product they can search for, advertising costs are low; search engines do much of the work. But most new online businesses seriously underestimate the costs of advertising. People must have a reason to come to your site. If they don't find you by search engines, then you'll need to drive them there by a combination of paid online and offline advertising.
4. Start-Up Costs. When you compare the costs of beginning an Internet business to opening a new brick-and-mortar store, the Web wins hands down. There are probably other ways the Internet saves a company money. But the point is easy to make. One of the purposes of a website should be saving money. For some businesses this will be more significant than any other purpose.